CRTC establishes fund to attain new high-speed Internet targets

Wants Canadians to have access to an unlimited data plan option and speeds of at least 50 Mbps download and 10 Mbps upload

OTTAWA-GATINEAU, QC, Dec. 21, 2016 /CNW/ - The Canadian Radio-television and Telecommunications Commission (CRTC) today declared that broadband access Internet service is now considered a basic telecommunications service for all Canadians. The CRTC is also setting ambitious new speed targets and creating a new fund that will invest up to $750 million over and above existing government programs.

Broadband and mobile servicesFurther to its legislative mandate, the CRTC has set the following targets for the basic telecommunications services that Canadians need to participate in the digital economy:

the latest mobile wireless technology available not only in homes and businesses, but also along major Canadian roads.

New funding for broadband projectsThe CRTC is establishing a fund to support projects in areas that do not meet these targets. Applicants will be able to submit funding proposals in order to build or upgrade infrastructure for fixed and mobile broadband Internet access services. The fund will:

make available up to $750 million over the first five years;

be complementary to existing and future private investment and public funding;

focus on underserved areas; and

be managed at arm's length by a third party.

Accessibility and tools for consumersThe CRTC wants Canadians to have access to the tools and services they need to empower themselves regarding fixed Internet access services. No later than six months from today, service providers should ensure that contracts are written in clear and plain language, and should make available online tools so consumers can easily manage their data usage.

Also, all wireless service providers will have to offer and publicize, no later than six months from today, mobile service packages that meet the needs of Canadians with disabilities.

The path forward for Canada's digital economyDuring its consultations with Canadians, the CRTC also identified further gaps regarding the adoption of broadband Internet services in Canada that are outside its core mandate. Today, the CRTC is submitting a report to the Innovation Agenda, as encouraged by the Minister of Innovation, Science and Economic Development Canada, on the availability and adoption of broadband Internet services in Canada. This report includes information on access gaps resulting from infrastructure, affordability and digital literacy issues, as well as barriers to connectivity in Indigenous communities.

The decision issued today complements the Government of Canada's Innovation Agenda. Looking ahead, the CRTC will contribute in ways appropriate to its mandate. However, all stakeholders have a role to play to ensure that broadband Internet service is universally available and barriers to adoption are removed.

Quick Facts

Broadband Internet access services are necessary to the quality of life for Canadians and empowers them as citizens, creators and consumers.

While most are well-served, many Canadians, particularly those in rural and remote communities, do not have access to broadband Internet access services that are comparable to those offered to the vast majority of Canadians in terms of speed, capacity, quality and price.

Broadband Internet services would allow more Canadian entrepreneurs to easily access crucial information relating to international markets and create more business opportunities across Canada.

In 2015, 82% of Canadians had access to speeds of 50 Mbps download/10 Mbps upload for fixed broadband services.

The CRTC is shifting its regulatory focus from wireline voice to broadband services.

Currently there is a subsidy for residential local voice services in rural and remote areas that amounted to approximately $100 million in 2016.

The current local voice subsidy will now be transitioned to the new funding mechanism announced today (for projects that meet the new targets).

Further to a broad consultation, more than 50,000 Canadians provided their views on the telecommunications services they need to participate in the digital economy.

Quote"Access to broadband Internet service is vital and a basic telecommunication service all Canadians are entitled to receive. Canadians who participated during our process told us that no matter where they live or work in our vast country—whether in a small town in northern Yukon, a rural area of eastern Quebec or in downtown Calgary—everyone needs access to high-quality fixed Internet and mobile services. We are doing our part to bring broadband services to rural and remote communities.

The availability of broadband Internet, however, is an issue that can't be solved by the CRTC alone. All players in the Canadian communications landscape will need to do their part to ensure Canadians have access to the services they need to participate in the digital economy.

All levels of government must address gaps in digital literacy. Affordability concerns are best addressed by the emergence of a dynamic market place where service providers compete on price for telecommunication services, in conjunction with social responsibility programs of telecommunications carriers and different levels of government.

High quality and reliable digital connectivity is essential for the quality of life of Canadians and Canada's economic prosperity."

Canadians, in urban areas as well as in rural and remote areas, have access to voice and broadband Internet access services, on both fixed and mobile wireless networks.

Mobile wireless and fixed broadband Internet access services are key components of this new objective. In addition, Canadians living in rural and remote areas should have a level of broadband Internet access services similar to those available in urban areas.

Criteria for the universal service objective

Fixed broadband service

Canadians should have access to fixed broadband Internet access service offerings that meet certain levels of speed, data allowance and quality of service. Specific values and parameters for these characteristics are discussed below.

Mobile wireless broadband service

Canadians should have access to the latest generally deployed mobile wireless technology (currently LTE). This technology should be available in Canada not only in homes and businesses, but on major transportation roads.

Fixed broadband Internet service criteria

Speeds

Canadian home and business subscribers of fixed broadband Internet access services can access speeds of at least 50 Mbps download and 10 Mbps upload. These speeds are to be the actual speeds delivered, not merely those advertised.

Data allowance

Canadian home and business customers can subscribe to fixed broadband Internet access services that include the option to have an unlimited data allowance.

Quality of service

Levels for latency, jitter, and packet loss will be established to assess high quality for fixed broadband Internet access service.

Measurement of success

Fixed broadband Internet access service, as set out in the decision, should be available in 90% of Canadian homes and businesses by the end of 2021 and in the remaining 10% within 10-15 years.

Modifications to current regulatory measures for local voice services

Local service subsidy

The local service subsidy will be phased out. A follow-up proceeding will be launched in early 2017 to examine how it should be phased out.

Accessibility

Availability and awareness

All wireless service providers must offer and publicize, no later than six months from the date of this decision, mobile service packages that meet the needs of Canadians with disabilities who tend to rely more on data services than voice services. These packages must ensure access to 9-1-1 service, and be based on consultations with Canadians with disabilities.

Bell Canada, Bell Mobility, Cogeco, Eastlink, MTS, Rogers Communications, SaskTel, Shaw, Telus and Videotron must each submit a detailed report, no later than six months for the date of the decision, concerning their respective plans to invest in the ongoing accessibility of telecommunications services.

Consumer empowermentregarding broadband Internet access services

Awareness and notification

Within six months of the date of this decision, all Internet service providers that provide retail fixed broadband Internet access service are expected:

(i) to ensure that contracts and related documents clearly explain, to all customers;

the services included in the contract,

any limits on the use of those services that could trigger overage charges,

the minimum monthly charge for services included in the contract,

information on where customers can find information on rates for overage charges, and

whether or not there is a maximum data overage charge that might be incurred in a monthly billing cycle, and if so, the amount of that maximum charge.

(ii) to provide account management tools that enable customers to monitor their data usage; and

(iii) to provide plain-language information on the data usage associated with common online activities.

The above-noted information and tools should also be accessible to customers with disabilities.

All providers of retail fixed broadband Internet access services must notify residential and small business customers who have incurred overage charges of where they can find information about:

(i) the account management tools offered, (ii) the data usage associated with common online activities, and (iii) alternative plans that may better suit the customer's needs.

Customers should be able to opt out of these notifications at any time. Such notifications must be provided each month in which a customer incurs data overage charges, unless the customer opts out of receiving such notifications.

New funding mechanism

Guiding principles

The new funding mechanism will focus on underserved areas in Canada.1

The CRTC will attempt to align this new funding mechanism with the broader ecosystem of current and future funding and investment.

To the greatest extent possible, the funding mechanism will be managed at arm's length from the CRTC, based on objective criteria, and administered in a manner that is transparent, fair and efficient.

Fund design

General

A competitive process will be used to distribute funds to successful applicants under the new funding mechanism.

Applicants will be able to submit funding proposals to build or upgrade access and transport infrastructure for fixed and mobile wireless broadband Internet access service

Government funding and private sector investment

Applicants requesting funding will be required to secure a minimum level of financial support from a government entity.2

Applicants will be required to provide a minimum amount of investment for their project.

The amount of funding from public and private sources cannot be nominal and must be commensurate with the nature of the project.

In the assessment stage, more weight will be given to applications with higher amounts of government funding and private investment in their projects.

Amount of funding

The current local voice subsidy will now be transitioned to the new funding mechanism.

The first five years of funding (amounts will be reviewed after three years) will be no more than the following:

Year 1: $100 million

Year 2: $125 million

Year 3: $150 million

Year 4: $175 million

Year 5: $200 million

For the first five years, up to 10% of annual funding will be allocated to satellite-dependent communities to cover operational costs and certain related capital costs.

Governance and accountability

The new funding mechanism will involve two main functions: project management and accounting.

Third-party administrator(s) will carry out these functions.

A fairness monitor will be appointed to observe the competitive process.

An audit committee will be established to verify the accounting function.

CRTC will retain oversight and will approve the projects to be funded.

Follow-up proceeding

The CRTC has set out preliminary views on the following aspects of the new funding mechanism:

Eligibility and assessment criteria.

Responsibilities of the CRTC and the third-party administrator(s) for the project-management and accounting functions.

A follow-up proceeding will be initiated in early 2017 to examine these preliminary views as well as other matters related to the new funding mechanism.

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1 An underserved area is defined as an area that does not meet the criteria used to measure achievement of the Commission's new universal service objective. 2 "Government entity" includes federal, provincial, regional and municipal entities, Aboriginal governments, community entities, and non-profit organizations.